Enablence Technologies Inc. (Toronto: ENA) has announced that it will be acquiring Wave7 Optics Inc. for $10.5 million and 2,078,385 shares of its own common stock. The total transaction values Wave7 at about $13.9 million. The transaction is expected to close before May 15, 2008.

In broadband access, keeping costs down is paramount, and Wave7 says that's a big motivator for this marriage. “The optical block represents the most significant cost contributor to the ONT and the Enablence PLC technology solution offers a substantial opportunity for cost reduction,” says Wave7 CTO Jim Farmer in a statement.

Enablence manufactures planar lightwave circuit (PLC)-based components such as transceivers for broadband access system vendors. While integrating its products directly into Wave7’s access platform will bring natural cost reductions, Enablence says it will continue to distribute its transceivers to other vendors as well.

Wave7’s access products include support for gigabit Ethernet passive optical network (GE-PON), gigabit passive optical network (GPON), and point-to-point Ethernet systems. They are all marketed under its brand name of Trident 7. (See Wave7 Adds Compact OLT and Wave7 Adds GPON.) The company claims to have a customer base of more than 100 fiber-to-the-home (FTTH) service providers throughout the world.

Shares of Enablence have dropped $0.07 (4.14%) to $1.62 in midday trading.

— Raymond McConville, Reporter, Light Reading